Performance appraisal is the step where the management finds out how effective it has been at hiring and placing employees

Performance appraisal is the stepwhere the management findsouthow effective ithasbeenathiringandplacing
employees.
performance appraisal is generallydone in systematic ways which are as follows:
1. The supervisors measure the pay of employees and compare itwith targets and plans.
2. The employers are in position to guide the employees for a better performance.
Objectives of Performance Appraisal
Performance Appraisal can be done with following objectives in mind:
1. To maintain records in order to determine compensation packages,wage structure,salaries raises,etc.
2. To identify the strengths and weaknesses ofemployees to place rightmen on right job.
3. To maintain and assess the potential presentin a person for further growth and development.
4. To provide a feedback to employees regarding their performance and related status.
5. To provide a feedback to employees regarding their performance and related status.
6. It serves as a basis for influencing working habits ofthe employees.
7. To review and retain the promotional and other training programmes.
ADVANTAGES:
PROMOTION: Performance Appraisal helps the supervisors to chalk out the promotion programmes for efficient
employees.In this regards,inefficientworkers can be dismissed or demoted in case.
COMPENSATION: Performance Appraisal helps in chalking outcompensation packages for employees.Merit
rating is possible through performance appraisal.Performance Appraisal tries to give worth to a performance.
Compensation packages which includes bonus,high salaryrates,extra benefits,allowances and pre-requisites
are dependenton performance appraisal.The criteria should be meritrather than seniority.
Employee development: The systematic procedure ofperformance appraisal helps the supervisors to frame
training policies and programmes.It helps to analyse strengths and weaknesses ofemployees so thatnew jobs
can be designed for efficient employees.Italso helps in framing future developmentprogrammes
Selection Validation: Performance Appraisal helps the supervisors to understand the validity and importance of
the selection procedure.The supervisors come to know the validity and thereby the strengths and weaknesses of
selection procedure.Future changes in selection methods can be made in this regard.
Communication: For an organization,effective communication between employees and employers is very
important.Through performance appraisal,communication can be soughtfor in the following ways:
Through performance appraisal,the employers can understand and acceptskills ofsubordinates.
The subordinates can also understand and create a trustand confidence in superiors.
It also helps in maintaining cordial and congenial labour managementrelationship.
It develops the spiritof work and boosts the morale ofemployees.
All the above factors ensure effective communication.

DISADVANTAGES
• First Impression (primacy effect): Raters form an overall impression aboutthe employee on the basis
of some particluar characteristics ofthe ratee identified by them. The identified qualities and features
may not provide adequate base for appraisal.
• Halo Effect: The individual’s performance is completelyappraised on the basis ofa perceived positive
quality, feature or trait. In other words this is the tendency to rate a man uniformlyhigh or low in other
traits if he is extra-ordinarily high or low in one particular trait. If a worker has few absences,his
supervisor mightgive him a high rating in all other areas ofwork.
• Excessive Stiffness or Lenience: Depending upon the raters own standards,values and physical and
mental makeup atthe time of appraisal,ratees maybe rated very strictly or leniently. Some of the
managers are likelyto take the line of leastresistance and rate people high,whereas others,by nature,
believe in the tyranny of exact assessment,considering more particularlythe drawbacks ofthe individual
and thus making the assessmentexcessivelysevere.The leniency error can render a system
ineffective. If everyone is to be rated high, the system has notdone anything to differentiate among the
employees.
• Central Tendency: Appraisers rate all employees as average performers.Thatis, it is an attitude to
rate people as neither high nor low and follow the middle path.For example,a professor,with a view to
play it safe,mightgive a class grade near the equal to B, regardless ofthe differences in individual
performances.
• Personal Biases: The way a supervisor feels abouteach ofthe individuals working under him - whether
he likes or dislikes them - as a tremendous effecton the rating of their performances.Personal Bias can
stem from various sources as a resultofinformation obtained from colleagues,considerations offaith
and thinking,social and family background and so on.
• Spillover Effect: The presentperformance is evaluated much on the basis ofpastperformance.“The
person who was a good performer in distantpastis assured to be okay at presentalso”.
• Recency Effect: Rating is influenced by the mostrecentbehaviour ignoring the commonly
demonstrated behaviours during the entire appraisal period.
Therefore while appraising performances,all the above biases should be avoidd.

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